Jan 11, 2016
The Story so far
1990 company founded1992 ‘diabetic’ chocolate bars1993 dairy free dark chocolate bars1994- No Added Sugar replaces ‘diabetic’2003 Range expands to include mints, easter eggs, boxed chocolates2005 Re Branding as ‘freefrom’2006 BRC & supply UK multiples 2009 Development of ‘alternative to milk chocolate’2010 Launch of O/L and Choices brand of ‘alternative to milk chocolate’
Choices Caramel wins Highly Commended at Quality Awards2011Expansion of range to include buttons
Choices Caramel wins Highly Commended at Freefrom Awards
The scope of freefrom.
Allergens YSugar Free/No Added Sugar YDietary Products N
The availability of ingredients & raw materials within the chocolate confectionery category.
Milk alternatives YGluten Free YWheat Free YEgg Free YNuts Free ?
The incidence of allergies & intolerances
Milk 1.5%Coeliac 1%Wheat < 1%Nuts <1%Eggs <1%Soya <1%
Other Opportunities
Diets 30%Lifestyle (vegan etc) 10%Genetic Disposition 30%(Lactose Intolerance)
Research in Ireland An Bord Bia (Irish Food Board)Base: Ever purchased Bakery/Confectionery
Satisfaction levels with current offering:
Overall satisfaction: 7.8Information: 7.7Value for Money 6.4Availability of product 7.0
Research in Ireland (An Bord Bia – The Irish Food Board)Base Ever Bought Bakery/Confectionery
Dairy/ Sugar Free/Gluten etc No Added Sugar
Must East 75% 25%Healthy Eating 25% 75%Purchase Frequency Often 75%
Not Often 75%Special Fixture in Store 75%Conventional Fixture 75%
Research in Ireland An Bord Bia (Irish Food Board)Base: Ever bought bakery/confectionery
Ever Tried Sugar Free/No Added 68%Gluten/Wheat 29%
Freefrom Products ever purchased
Bread 39%Breakfast Cereals 31%Rice Cakes 29%Sweet Biscuits 20%Chocolate 19%
Research in Ireland An Bord Bia (Irish Food Board)
Suggested improvements Base Ever Bought
Cheaper Price 23%Wider Selection 9%Availability 8%
Research in Ireland An Bord Bia (Irish Food Board)
Ideal Free From Product
Clear Ingredient Labelling 50%Low Price 49%Great Taste 51%
The scale of the market for freefrom in the chocolate category
Dairy Free 1.5%Gluten/Wheat Free 1.0%Sugar Free/No Added Sugar a variant on conventional chocolate
A Parallel Universe Soya/Rice Milk
% of Liquid Milk sales 2.5% - 3.0%Growth Rate 25% p.a.
Have Tried 60%Don’t Like the Taste 30%Wouldn’t try it again 19%Regular Users 7%
The scope of the market for freefom +/- 3% of pop
Market Drivers Quality/Taste ImprovingPrice Too HighAvailability ImprovingAwareness Limited to ‘must haves’
The Freefrom Universe
ConsumersRetailers MainstreamRetailers SpecialistSuppliers CommercialSuppliers Artisan
The UK Multiples
Asda Freefrom Aisle Freefrom Own Label Freefrom BrandedMorrisons Freefrom Aisle Freefrom Own Label Freefrom BrandedSainsbury’s Freefrom Aisle Freefrom Own Label Freefrom BrandedTesco Freefrom Aisle Freefrom Own Label Freefrom Branded
What’s the size of the cake?
Grocery spend on Food £71bn Freefrom @ 3% £2 bn
Key Categories
Dairy £10.0bn Freefrom @ 3% £200 mBakery £ 8.5 bn Freefrom @ 3% £255 mConfectionery £ 6.8 bn Freefrom @ 3% £200 m
[Note fragmentation of categories outside of dairy/bakery i.e not all or most of the category requires a freefrom alternative]
Limiting Factors
Multiples Store SpaceTurnover per sq ft v conventionalProduct Quality & RangePricesFood Safety Issues
Convenience Stock losses due to weak t/o of freefrom volumesPrimary focus on Big Brands
Convenience supplies existing productsMultiples/Specialists develop new products
Multiples have taken the lead in the development of freefrom.
Will freefrom become mainstream?
Only if it can deliver TasteQualityRangePriceFood Safety
Equal or better to conventional option.
Is this possible?
Back to the Future?
1970’s Fresh Milk sold at ambient temperature in shopsFunny thing called ‘yoghurt’ finds tractionGrowth limited by Range, Quality, PriceGrowth limited by cost/availability of chilled spaceEarly brand leaders dominant
Noughties Massive chilled display aislesEnormous range of chilled dairy productsConsumer speak includes ‘l casei immunitas’, ‘plant sterols’ etc.Category dominated by international brands
Prognosis Freefrom will grow at a fast rateGrowth will be facilitated by multiplesGrowth will be driven by quality/taste/rangePrice will be a key factor
Own Label or Branded?
Primary consideration is consumer need & behaviour
Freefrom consumers need appropriate products to eatFreefrom Consumers shop local & national retailersFreefrom Consumers buy O/L and branded
O/L works for larger volumes & everyday purchases
Branded works for smaller volumes & gift e.g. easter eggs, boxed chocolates and independent retailers/smaller outlets
Celtic Chocolates
We like making life a little better for people with food allergies/intolerances and special needs We like working with our colleagues in the retail and distribution sector
We like the feedback to date to our freefrom range
We plan to expand our range even further.
We dreaming of a ‘white’ Christmas !
Thank You!
Joe CalleryManaging DirectorCeltic Chocolates LimitedSummerhillCo MeathIreland